gitlab reports 43% jump in base customers in q1 2023

GitLab, a collaborative software development platform, announced today that its customer base experienced an increase of 43% during the first quarter of the 2024 fiscal year, which ended on 30 April.

In its quarterly earnings report covering this period, the San Francisco-based DevSecOps platform informed that it added a total of 2,238 new base customers during that 12-month period and 404 compared to the previous quarter.

Base customers, as defined by GitLab, are those that generate annual recurring revenues (ARRs) of at least $5,000 for the business. Overall, GitLab estimates that over 30 million developers use their software to code in a collaborative environment, meaning that they can make changes and see what other people code as long as they have permission to do so.

$100K ARR Customers Now Account for 34% of GitLab’s Overall Base

During this same period, GitLab added 215 news customers that generate annual recurring revenues (ARRs) of $100,000. To date, the company has 760 of these customers. They provide stability to the company and growth opportunities.

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Customers with $100K ARR grew by 39% compared to a year ago. This makes GitLab a fast-growing DevSecOps platform and the incorporation of artificial intelligence may propel the adoption of its solution to the next level.

Revenues during the three months ended in April surged by 45% as a result of this positive growth on the customer base front to $126.9 million while GAAP operating losses increased by 35.7%.

Meanwhile, the firm managed to reduce its cash burn significantly during the period, as negative free cash flows stood at $11 million compared to $30 million it burned during the same period a year ago.

In addition, GitLab maintains solid cash reserves of over $900 million to stay afloat despite the current macroeconomic headwinds. This is a positive aspect of its business considering the challenging conditions that companies have to deal with at the moment to raise funds.

Investors are reacting quite positively to the report as the GitLab stock is surging by nearly 32% in mid-day stock trading action to $46.6 per share. An improvement in the firm’s negative operating margins and these good results in terms of customer and revenue growth are fueling this jump in the stock price.

AI Could Have a Huge Impact on the Financial Performance of GitLab Down the Road

gitlab has a total addressable market of $40 b

GitLab estimates that its total addressable market (TAM) is worth at least $40 billion. The use of artificial intelligence should help the company scale its operations to the next level as customers immediately save money and time by using the technology to speed up the process of building and deploying applications.

In late May, the firm announced the release of GitLab 16 – its latest upgrade to the platform. Among the many updates highlighted by the company, the addition of AI capabilities and tools is perhaps the most notable.

Some of the most interesting tools allow programmers to get coding suggestions, rapidly get a sense of what a certain code does via a feature called “Explain this Code”, and identify potential security weaknesses through a solution called “Explain this Vulnerability”.

“GitLab 16 delivers the most comprehensive enterprise DevSecOps platform in the market with more AI-powered capabilities available to customers today than any other DevOps or DevSecOps platform”, commented David DeSanto, the company’s Chief Product Officer, in regards to the launch.

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GitLab partners with both AWS and Google Cloud to help developers code faster and create native integrations that they can easily deploy. In addition, they work with companies like IBM, ServiceNow, and Accenture to allow customers to create customized solutions by using their solutions.

There are three subscription tiers that users can choose from, starting with the free package, which can house up to 5 users at a time, and moving to the premium and ultimate packages that cost $29 per user per month and $99 per user per month respectively and come with several other privileges and features.

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